KOLKATA: Indian travellers returning home will now have to pay Customs duty on TV sets they buy overseas. The government on Monday slapped a 10% Customs duty and 12.5% countervailing duty on such imports, as part of its efforts to discourage import of non-essential items and reduce the current account deficit that has put enormous pressure on the rupee.

Till now, travellers could bring a TV set worth 35,000 with them without having to pay import duty. This had resulted in Thailand, Dubai, Singapore and Malaysia becoming attractive shopping destinations.

Local Industry Cheers Move

It was cheaper to buy LED, LCD and plasma televisions of up to 42 inches in these countries compared with India. According to industry estimates, such imports account for nearly 20% of India's total market of 8 million flat panel TV sets.

The government's move to impose Customs duty has brought cheer to the domestic television industry, which has been lobbying with the government to stop such imports as they were 30-50% cheaper than TV sets available in the country and were eroding the profits and sales of local manufacturers.

While a Sony 46-inch LCD TV costs around 60,000 in India, in stores such as Jumbo Electronics in Dubai a similar model is available for around 38,000. Similarly, Singapore's Mustafa Centre sells a 32-inch LG LED TV for around 14,000 against its India price of around 25,990. Bangkok's top electronic store Power Buy sells a Samsung 40-inch 3D LED TV at 42,000 against the India pricing of around 74,000.

"The price difference is because of the 30% taxes the brands have to pay for local manufacturing in India. These restrictions will arrest such indiscriminate imports since the price difference will be marginal," said Consumer Electronics and Appliances Manufacturers Association (CEAMA) Secretary GeneralSuresh Khanna.

According to CEAMA estimates, more than 3,000 flat panel television sets land daily as tourist baggage from Dubai, Singapore, Bangkok and Kuala Lumpur at the Mumbai, New Delhi, Chennai, Kolkata and Kochi airports. At least 40 passengers per flight from each of the four foreign cities buy and import multiple television sets as personal baggage.

Videocon directorAnirudh V Dhoot said the consumer electronics industry has invested more than 1,500 crore in setting up manufacturing facilities for flat panel television in India.

"The industry was utilising 70% of the capacity. This apart, the import of television sets under free baggage allowance was creating revenue loss of around 750 crore for the Centre and state governments. It is a welcome move," he said.

The Indian subsidiaries of Sony, Samsung, LG and Panasonic have already reduced warranty and repair support for imported television sets in India, and even started to charge consumers for it.